Inequality and well-being

from Lars Syll

Source

Inequalities in Asia – Call for papers for WEA online conference

Call for papers for the Inequalities in Asia conference

Inequalities in Asia

It is generally recognized that inequalities of various kinds have been exacerbated during the period of globalization. This is true of global/regional inequalities as well as within-country disparities, except in a few countries where very conscious policies have been taken to reverse this. Concerns with growing inequality extend well beyond issues of justice and fairness, since the degree of economic inequality also affects social cohesion and political instability, and can also have negative implications for economic growth and sustainability.

This conference will focus on various aspects of inequality in South, Southeast and East Asia from the broader perspective of examining their interlinkages with other economic, social and political processes. This region is known to have been among the most dynamic in terms of income growth as well as structural change, and the evidence of increasing inequalities is also marked in several major countries of the region.

The broad themes to be covered are noted below (I-VII). In addition, some more specific questions that could be taken up in individual papers are mentioned, but these should be seen only as indicative suggestions. Papers that consider other aspects that are not explicitly noted here are also welcome. 

Fix the Debt and a Wall Street Sales Tax

from Dean Baker

At this point everyone knows about Fix the Debt. It is a collection of corporate CEOs put together by Peter Peterson, the Wall Street private equity mogul. Ostensibly they want to reduce budget deficits and the national debt, but for some reason their attention always seems focused on cutting Social Security and Medicare. While some in this group will allow for minor tax increases, budget cuts are explicitly a priority, with these two programs firmly in their crosshairs.

Given that the stated goal of this group is to reduce budget deficits, it is worth asking why taxes don’t figure more prominently on their agenda. After all, the United States ranks near the bottom of wealthy countries in its tax take as a share of GDP. It is also worth asking why one tax in particular, a financial transactions tax, never seems to get mentioned in anything the group or its members do. 

Inequality, the Second Great Depression, and mainstream economics

from David Ruccio

This morning, we’re faced with the extraordinary spectacle of two left-of-center, Nobel Prize-winning economists stumbling all over themselves trying to make sense of the role of inequality in creating and sustaining the Second Great Depression.

Really?! Now, they may have missed the trend of growing inequality over the course of the past three decades. Still, with all the talk of obscene levels of inequality in the last five years and mainstream economists, even the best and the brightest, are still having a hard time formulating a theory about the impact of that inequality in producing the conditions for the crash of 2007-08 and sustaining the recovery that never was.

First, Joseph Stiglitz argued that “Inequality stifles, restrains and holds back our growth.” Then, Paul Krugman responded by telling us he’s not convinced “that this particular morality tale is right.” 

For the bottom 60 percent of households in the US, wealth declined from 1983 to 2010 (chart).

from David Ruccio

Global economic inequality: the billionaires vs. the penniless

from Deniz Kellecioglu

The top richest individuals of the world have economically recovered from the global financial crises and its aftermath. They are now actually wealthier than five years ago.

A look at the Forbes annual lists of the world’s billionaires reveal that this group had their wealth almost halved between 2008 and 2009. However, this proved to be just a temporary slump as all their losses were recovered in just two years (see table below). If people in poverty could also recover like that, it would be easy to eradicate poverty.

Comparisons of income distribution in the USA in 2007 and England in the 17th century (2 charts)

from Edward Fullbrook

The following two charts from http://www.the-crises.com/  compre the distribution of income in the United States in 2007 and England in the seventeenth century.   

Lies, damned lies, and the right-wing use of income statistics

from David Ruccio

source

The right-wing wants desperately to show—against all the evidence—that the rich are being taxed to death and that income inequality has dramatically decreased. 

Where has all the surplus gone?

from David Ruccio

Where has all the surplus gone? 

Gigo

from David Ruccio

Once you’ve stated the obvious point that the financial sector “has grown to an unprecedented share of the economy,” how do you make sense of that growth?

Well, if you’re Paul Krugman, you send us to Thomas Philippon’s unpublished essay, “Has the U.S. Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation” (pdf) [ht: br]. And that’s when the fun—or the horror—begins. 

Fed survey shows middle class took a big hit

from Dean Baker

The Federal Reserve Board’s newly released triennial Survey of Consumer Finance (SCF) confirmed what most of us already knew: The middle class has taken a really big hit. It showed that between the 2007 survey and the 2010 survey, the typical family had lost 38.8 percent of their wealth. In fact, the wealth of the typical family was down 27.1 percent from where it had been a decade ago in 2001. This is in spite of the fact that the economy was more than 15 percent larger than in 2010 than it had been 2001.

It wasn’t just wealth that had dropped; the survey showed that income had fallen as well. Median family income in 2010 was down by 7.7 percent from its 2007 level and 6.3 percent from its level a decade ago.

Low-wage lessons

from John Schmitt

As I write in a new CEPR briefing paper (pdf), the United States leads the wealthy world in the share of its workforce in low-wage jobs. According to the commonly used international definition of low-wage work –earning less than two-thirds of the median hourly wage– about one-fourth of US workers are low-wage.

Regime change (Gini chart)

from John Schmitt

Over the last decade, as economic inequality in the United States was growing, income inequality was on the decline in most of Latin America. In March, economists Darryl McLeod and Nora Lustig circulated a working paper (pdf) arguing that, in Latin America, the “social democratic regimes in Brazil and Chile were more successful at reducing inequality and poverty than the so-called populist regimes of Argentina, Bolivia, and Venezuela.”

This time, Krugman is right. Lowering nominal wages is really, really hard (charts).

from Merijn Knibbe

According to Paul Krugman, in a recent blogpost,

It is really, really hard to cut nominal wages, which is why reliance on “internal devaluation” is a recipe for stagnation and disaster.The crisis really has settled some major issues in economics. Unfortunately, too many people — including many economists — won’t accept the answers

The title of Krugman’s post is ‘Lessons from Europe’. That’s wrong.

United States of economic insecurity (charts)

from David Ruccio

Almost half of all Americans, or 45 percent of the U.S. population , do not earn enough to cover their basic expenses. They live in a state of economic insecurity.

A new report by Wider Opportunities for Women [pdf] documents the extent to which large numbers of Americans—including those who played by the rules and managed to find jobs, form household, and raise children—are living on the edge. They simply do not earn enough to pay ever-increasing housing, food, health care, and other expenses.